Loaning someone some cash

donfanatico

Question:

If I wanted to loan someone a substantial amount of cash without me wanting to know what they needed it for and applying a very low interest rate , say 1 , 2 or 3% (which is still better than classic loans) and agreeing to a repayment system, what are the legal implications of this?

I would draw up a contract that they would sign? IS this enforceable in court should we fall out or something happened that they were suddenly unable to keep up the repayments or to do the repayment in full if we a such agree on a future date when this would be due?

Are there any downloadable templates for such contracts?

Many thanks!

Apples2

You want to loan someone a "substantial amount" without knowing what it is for?
That excuse is unlikely to stop you going to prison.

You're a madman or simply trolling.
What do you think could happen if they fail to repay the loan?
If they have no money, you may win a Court case but the court will expect them to repay a sum they can afford (£1 per month)

You could draw up your template on this

gb12345

You might find this useful in future as well



Keep it on your wrist when you are in the showers - might avoid any unwanted attention from your new neighbours.

donfanatico

So I guess it is not a good idea then...

When you take out a loan at a bank they do ask you what the loan is for but that doesn't mean that it will be used for that purpose.

Anyway , thanks for your answer.

gb12345

donfanatico wrote: »

When you take out a loan at a bank they do ask you what the loan is for but that doesn't mean that it will be used for that purpose.

But if it isn't used for the purpose stated and was used for something illegal then the bank will usually have all the standard "know your customer" paperwork to prove that they made every effort to ensure they weren't providing funds for illegal purposes.

In addition, the applicant will have committed fraud to be added to whatever else they were up to.

27col

You could get a judgement in your favour if you had a signed agreement presumably. However, if the borrower had no money and had defaulted, you still would not get your money back except, possibly at £1 a week as Apples says. The expression "getting blood from a stone" springs to mind. As for the idea of lending to someone without knowing the reason, sounds like a recipe for disaster.

SnowTiger

donfanatico wrote: »

So I guess it is not a good idea then...

When you take out a loan at a bank they do ask you what the loan is for but that doesn't mean that it will be used for that purpose.

Anyway , thanks for your answer.

It's usually not a good idea.

If they were unable (or unwilling) to repay the loan you could go to court; but even a judgement in your favour doesn't mean you'd get your money back.

Mojisola

It's probably best to follow the old rule for gambling "Never lend (or gamble with) money that you can't afford to lose".

C_Mababejive

If you want to advance me a personal loan I'll pay you 3% and sign a contract for security. I have a 5 star gold plated provable credit history. You wont get 3% in the building society...

marleyboy

I have known best friends turn enemies as a result of offering a cash loan.

lynz68

Have they been rejected by a bank? If so that should be ringing alarm bells in your head. Can you afford to loose the money because that is realistically what you could be facing.